Australia’s major banks have reported stable results in the first half of the financial year.
KPMG’s Australian Major Banks Half Year 2024 Results Analysis finds that the Majors reported a combined profit after tax of $15.0 billion, down 10.5% compared to the first half of 2023, and an average of 0.3% from $15.1 billion for the second half of 2023. Income is broadly flat, the pace of margin erosion has slowed and operating expenses have reduced modestly compared to second half of 2023.
Interactive banking results dashboard
Compare and analyse the results of the four major banks across 10 years of historical data including income, costs, liquidity, asset quality and returns. Also select to view half year or full year reporting metrics.
Big 4 banks' results: KPMG's insights
Results summary
Income
Average net interest margin for the Major Banks was 179 basis points for 1H24, a decrease of 11 basis points from 1H23, and 5 basis points from 2H23. This was driven by continued strong competition within the mortgage market and increased costs of deposit funding.
Average interest earning assets increased by 3.3% from 1H23 and 1.9% from 2H23 with all four banks reporting increases. Despite this, net interest income has decreased by 2.4% on average compared to 1H23, and 0.5% from 2H23.
Fees and commission income, which makes up 9.9% of the Majors’ total income, increased by 4.0% from 1H23 and 3.1% from 2H23, primarily driven by growth in lending fees due to higher volumes.
Costs
The average cost to income ratio in 1H24 of 48.7% increased by 348 basis points from 1H23, however improved by 43 basis points from 2H23. These movements are consistent with the respective changes in total operating expenses over the same periods.
Over the past 12 months, the Majors reduced total headcount by approximately 0.5% and, although personnel expenses increased compared with 1H23, there was a decrease of 0.3% compared with 2H23.
Investment in Compliance and Risk has continued to decrease, which is consistent with an overall decrease in investment spend over the last 18 months.
Liquidity
Capital and liquidity ratios remain well above regulatory minimums, demonstrating balance sheet and liquidity strength. The average Liquidity Coverage Ratio (LCR) increased to 135.3%, up 100 basis points from 2H23 and the average Common Equity Tier 1 (CET1) is 12.6%, an increase of 10 basis points compared with 2H23.
While the average leverage ratio decreased by 6 basis points from 2H23 to 5.3%, it is still well above the 3.5% APRA minimum requirement across the Majors.
Liquidity coverage ratio
Asset quality
The Majors booked $1.21 billion in impairment charges in 1H24, which is approximately 13% lower than over the past 12 months. Over the first half, the average expected credit losses (ECL) as a percentage of gross loans and advances remained steady at 0.68% which is indicative of the continued strength of the Majors’ portfolio credit quality.
Total impaired loans have increased by 2.2% across the Majors in the last 12 months, although this is in the context of overall portfolio growth. The average percentage of total ECL associated with distressed loans (Stage 2 and Stage 3) decreased marginally by 6 basis points to 74.3% in the last 6 months.
ECL as a percentage of Gross Loans and Advances (GLA)
Shareholder returns
Return on Average Equity decreased in the first half of FY24 compared with both 1H23 and 2H23 by 145 and 12 basis points respectively, to an average of 10.9%.
The Majors declared higher interim dividends with an increase in the average dividend per share of 2.9% compared to the first half of 2023. The Majors carried out $2.0 billion in share buybacks in 1H24, which in total is higher than both 1H23 and 2H23 respectively.
Return on equity
Interactive banking results dashboard
Compare and analyse the results of the four major banks across 10 years of data including income, costs, liquidity, asset quality and returns. Also select to view half year or full year reporting metrics.
This historical data is drawn from major bank financial statements and disclosures, augmented with APRA financial statistics.
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FAQs
Who are the four major banks in Australia?
Australia’s biggest banks (known as the top 4 banks) are: National Australia Bank (NAB), Commonwealth Bank of Australia (CBA), Australia and New Zealand Banking Group (ANZ) and Westpac (WBC).
Where does the data for the major Australian banks 2024 results come from?
The data is drawn from the big four Australian banks' financial statements and disclosures, augmented with financial statistics from The Australian Prudential Regulation Authority (APRA).
What can expect to see in the KPMG banking dashboard?
You can compare and analyse the results of the four major banks across 10 years of historical data including income, cost, liquidity, asset quality and results. The dashboard will also soon feature half year historical data.